Bhutan is proving that continued investments in GovTech solutions and reforms help build a strong resilient foundation to shocks like the coronavirus.

The country follows the unique concept of Gross National Happiness (GNH), which takes a holistic view and approach towards development, to measure prosperity. Under GNH, good governance is a key pillar and Bhutan scores higher on all six World Governance Indicators compared to other countries in South Asia and has shown continued improvements in these indicators over the last decade.

A critical component of this success is the steady progress in strengthening PFM policies and systems. The Government has actively taken steps to integrate its financial management information systems (FMIS) with other government systems for greater efficiency.

When the Government of Bhutan launched the country-wide electronic payments functionality through their electronic Public Expenditure Management System (e-PEMS) as part of the IFMIS development in 2019, they would learn in hindsight that this investment would prove immensely useful a year later as the world grapples with the COVID-19 pandemic. The e-PEMS facilitated smooth delivery of payments to vendors and civil servants and played a significant role in transferring relief payments to beneficiaries across the country, the latter under a scheme titled Druk Gyalpo’s Relief Kidu which means the Dragon King’s welfare, self-help and assistance.

Druk Gyalpo’s Relief Kidu is one of the most important measures undertaken under by the Royal Government of Bhutan to provide immediate relief to distressed individuals whose livelihoods have been impacted by the pandemic. Relief is not only limited to cash grants but also covers defraying the cost of living expenses such as shelter, food and medicine. Above all, the objective is to “boost morale and provide assurance of hope despite current hardships”.

Bhumika Monger of Lhamoidzingkha said, “While the future ahead is still bleak in terms of getting a job, I felt reassured with the relief kidu. One thing has become clear to me that no matter how worse the situation turns out to be, I can always count on His Majesty’s compassion.”

The e-PEMS became the frontline tool that enabled disbursement of cash grants from the Kidu relief fund of almost USD 2.15 million to 14,634 recipients as the first installment in April 2020. The disbursement through e-PEMS has greatly facilitated prompt electronic payments to the beneficiaries directly into their bank accounts.

By making this process entirely electronic, it also eliminated the need for physical contact helping contain the spread of the virus. Various e-government systems have been integrated with each another thus enabling a more cohesive government service delivery system platform eliminating the need for physical presence. These systems have also facilitated implementing Work from Home (WfH) directives from the Royal Civil Service Commission (RCSC) and making the social and physical distancing requirements much smoother.

As important as technological updates are, they need to be backed by the proper analog components such as legal reforms as well. The Public Finance Act of 2007 in Bhutan provided a legal framework that would allow the Ministry of Finance to use public funds for emergency expenditures. This framework was then submitted to Parliament which passed the Supplementary Appropriation Bill. The Ministry of Finance notified the procedures and how activities related to the pandemic would be implemented to ensure proper budgeting, timely disbursement of funds, proper accounting, and finally, audits of the COVID-19 related expenditures. This is an example where strong systems and good governance converge.

The citizens of Bhutan have fared better than others around the world during the crisis due to a combination of swift government actions, citizen participation and investments in GovTech that are paying off.

“Whatever I do, will not be able to repay the debt I owe my King, and the country for the free education, healthcare and now the relief kidu during this most difficult time of my life,” said Tashi, 55, from Pema Gatshel. “Every day, I pray for the good health and long life our King for all that our King has done and continues to do.Because of him, every night I can look forward to the next morning.”

Bhutan, however, has not yet seen the end of the situation yet. The government has taken further prevention and preparedness measures with an emphasis on critical medical services and advisories. Schools and public space closures, work from home and social distancing measures continue to be put in place. During such an unprecedented time, the public service delivery is critical, and it is clear that having an efficient and effective PFM system is all the more important. e-PEMS and other PFM reforms in Bhutan are being supported by the Public Financial Management-Multi-Donor Fund Program which is administered by The World Bank and funded by Austrian Development Agency and European Union.

As demonstrated in the above case in Bhutan, strengthened PFM systems helped the country to better manage the challenges created by the pandemic.

Author: Mr. Tshering Dorji, Director, DPA
Source: Word Bank, Blog

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Name                           : Lungten Tshering
Position Title               : P2 A
Agency                : Regional Revenue & Customs Office,P/Ling 
Active Service             : 01/09/1984 to 01/01/2020

Mr. Lungten Tshering (EID No.8409010), Joint Collector, Regional Revenue & Customs Office, P/Ling under Department of Revenue and Customs Office has retired from the Civil Service with effect from 1^st January 2020.

The Ministry of Finance would like to convey our sincere gratitude to him for rendering 35 years 4 months service with utmost dedication and sincerity to the Tsa-Wa-Sum.

Name                           : Santa Kharka Chhetri
Position Title               : S2 A
Agency                        : Regional Revenue & Customs Office, Gelephu
Active Service             : 14/04/1986 to 01/01/2020

Mr. Santa Kharka Chhetri (EID No. 8604112), Tax Inspector II, Regional Revenue & Customs Office, Gelephu under Department of Revenue and Customs Office has retired from the Civil Service with effect from 1^st January 2020.

The Ministry of Finance would like to convey our sincere gratitude to him for rendering 33 years 7 months 22 days service with utmost dedication and sincerity to the Tsa-Wa-Sum.

“We wish them a happy retired life here after with his family.”

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The Department of Revenue and Customs, Ministry of Finance, Thimphu is organizing its 6th Revenue Meet from 25th – 27th December 2019 at the Regional Revenue and Customs Office, Gelephu with theme “efficient and effective services through digital transformation”.

As the Nation implements its 12FYP, the DRC as one of the important arm of the Ministry of Finance is meeting in Gelephu over next three days to take stock of issues and review our strategic plan and priorities with an objective to improve the service delivery to the taxpayers, facilitate cross border trade, contribute towards Government’s aspirations of economic self-reliance and ultimately play our part in promoting Gross National Happiness. The meeting will focus on innovative ideas, policy reforms, simplification and harmonization of procedures, enhance efficiency and effectiveness in the delivery of services to the taxpayers and discus on smart taxation systems for better economic prosperity.

It is also an opportunity for the Department, eight Regional Revenue and Customs Offices, Liaison and Transit Office and border checkposts to come together to share experiences from field, ensure uniform application of the rules before the onset of tax season from January 2020. A total of more than 70 key officials covering twenty dzongkhas are participating in this meeting.

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Name: Sonam Dorji
Position: P2 A
Agency: Regional Revenue & Customs Office, Samtse
Active Service: 01/09/1987 to 01/12/2019

Mr. Sonam Dorji (EID No. 8709021), Joint Collector, Regional Revenue & Customs Office, Samtse under Department of Revenue and Customs Office has retired from the Civil Service with effect from 1^st December 2019.

The Ministry of Finance would like to convey our sincere gratitude to him for rendering 32 years 2 months 21 days service with utmost dedication and sincerity to the Tsa-Wa-Sum.

“We wish him a happy retired life here after with his family.”

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The Ministry of Finance had organized the Civil Service Award ceremony for the year 2019 on 11 December 2019 at NRDCL Conference Hall. The award ceremony was graced by Hon’ble Finance Secretary Dasho Nim Dorji.

Addressing the ceremony, the Hon’ble Secretary informed the gathering that the civil service award was initiated by the RCSC upon the command of His Majesty the King for the recognition of distinguished contribution and hard work of all the recipients. The Hon’ble Secretary further emphasized that it was an excellent opportunity for recipients and all other employees of Ministry of Finance to pay tribute and rededicate the commitment and loyalty to serve Tsa-Wa-Sum. The Hon’ble Secretary congratulated all the award recipients.

The total of 52 employees had  been awarded the service award under four categories;

1. Lifetime Service Award : 7
2. Gold (30 years)                 : 7
3. Silver (20 years)               : 14
4. Bronze (10 years)             : 24

***CONGRATULATIONS TO ALL***

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THIMPHU CONSENSUS STATEMENT ON INTERNAL AUDIT SIGNED

The Hon’ble Finance Minister of Bhutan, Lyonpo Namgay Tshering emphasized the importance of internal audit in government and advised that internal auditors should move ahead from compliance audits and become trusted advisors to the management. The Finance Minister was speaking at the Regional Internal Audit Workshop held on August 27-
28, 2019 at Thimphu, Bhutan. The theme of the Workshop was “Government Internal Audit: Embracing the Changes and Innovations”. The two days’ workshop was attended by dignitaries from the World Bank, the Austrian Development Agency, IIA Malaysia, BPKP of Indonesia, ICAI India and participants from Royal Audit Authority, Anti-Corruption Commission, government internal auditors including participants from Indonesia, India (the states of Assam and Uttarakhand), Nepal and Sri Lanka.

The workshop was inaugurated by the Honorable Finance Secretary, Dasho Nim Dorji. He highlighted the importance of professional development as it is a highly technical profession and irrespective of facing the challenges of attrition rates and others, internal audit plays an important role in public financial management and good governance. He continued to state that strengthening the internal audit services keeps internal controls strong and helps the nation in ensuring the proper use of the limited public resources. The workshop discussed the use of technology in internal audit and contemporary audit methodologies including performance and risk-based audits. The participants were unanimous that the internal audit organizations particularly in governments face common challenges including: inadequate response to audit findings, attracting and retaining talent and capacity building of the internal auditors. Substantial efficiency gains could be achieved using technology tools for automating audit management and undertaking analytics. The representative from ICAI highlighted that Bhutan being a small country can embrace new technologies much faster as compared tosome of the large countries. It was emphasized that internal audit should not be mixed up with internal control and risk management, as the former is a function to ensure that management takes responsibilities of the latter. The Internal audit plays a crucial role in strengthening governance and it is important that all stakeholders including the auditee-management, internal auditors, the supreme audit institution and the anti-corruption agency should work together to strengthen the internal audit function, which is an important governance and leadership institution.
The CCA conducted this workshop with technical inputs from the Ernst & Young LLP and the World Bank. The workshop covered presentations by experts on various topics and ended with panel discussion on “Enhancing Relevance and Effectiveness of Internal Audit”.

The conference concluded with an agreement to continue the knowledge exchange efforts for mutual advancement of strengthening internal audit. For this purpose, the participants signed a Consensus Statement on Internal Audit including creation of a Joint Public Sector Internal Audit Community of Practice for the South Asian and East Asian countries as a platform for sharing experiences and ideas. Bhutan and Indonesia are also in advanced stages of signing a Memorandum of Understanding (MoU) for collaboration on strengthening of internal audit. RGoB is undertaking reforms to strengthen public financial management under the Pubic Financial Management Multi Donor Fund (PFM-MDF) administered by the World Bank and funded by the Austrian Development Agency and the European Union. This Regional workshop was organized under the internal audit component of the PFM-MDF Project, which is supporting the implementation of the RGoB’s Public Financial Management Reform Strategy.

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1. Hon’ble Finance Minister, Lyonpo Namgay Tshering launched the electronic Public Expenditure Management System (e-PEMS) and Global Interchange for Financial Transaction (GIFT) payment system on July 22, 2019 at Le Méridien, Thimphu.

2. The e-PEMS is developed by Department of Public Accounts (DPA), MoF in collaboration with the Royal Monetary Authority (RMA), Bank of Bhutan Ltd. (BoBL), Department of Revenue and Customs (DRC) and Department of Information Technology & Telecom (DITT).

3. This is an important milestone towards enhancing the Public Financial Management and to promote cashless and digital payments in the country.

4. The e-PEMS is an online accounting and payment system of the Royal Government of Bhutan implemented from July 2019 (FY 2019-20).

5. The GIFT payment system launched by the RMA is a payment platform developed to complement and support the settlement of interbank transactions for e-PEMS and the general public.

6. The GIFT payment system supports 3 types of payment services – BITS (or batched) settlement service, Real-Time Gross Settlement Service (RTGS) and Bulk Payment Service.

a. BITS (or batched) settlement service – The BITS would enable high value interbank fund transfer in a batched settlement cycle. The batch timings are set up by RMA in line to the operational timings of the banks.

b. RTGS – Real-Time Gross Settlement Service – Payments made through this service are settled immediately on receipt. The RTGS would allow the transfer of money from one bank to any other bank on a “real time” and on a “gross” settlement basis. RTGS systems are typically considered a systemically important payment system.

c. Bulk Payment Service – The Bulk Payment service can handle cases where multiple beneficiaries are to be credited from a single account. These transactions are targeted for mainly institutional payments E.g. Salaries, pension payments, loan repayments etc.

7. The implementation of e-PEMS and GIFT payment system is expected to bring following benefits:
-Eliminate use of manual cheques;
-Simplify bank reconciliation process;
-Improve public service delivery through reduced turnaround time (TAT);
-Minimize risks of fraud, corruption and rent seeking opportunities;
-Improve reporting and consolidation of the Government accounts;
-Support initiative of moving towards cashless economy; and
-Reduce administrative burden.

8. With the implementation of e-PEMS and GIFT payment systems, it is expected to greatly reduce administrative burden and improve public service delivery through enhanced Public Financial Management system. Further, it will also improve timely reporting and consolidation of the Government accounts which will help in making informed decisions.

9. The e-PEMS has been developed with financial and technical support under multi donor fund (MDF) which is contributed by European Union (EU) and Austrian Development Agency (ADA), and administered by the World Bank (WB).

10. The GIFT has been developed with the guidance from the Reserve Bank of India (RBI) with technical support from Indian Financial Technology and Allied Services (IFTAS).

e-PEMS Brochure

e-PEMS Clip

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His Excellency Lyonpo Namgay Tshering’s participation in the 2019 ECOSOC Forum on Financing for Development Follow-Up

His Excellency Lyonpo Namgay Tshering participated in the fourth 2019 ECOSOC Forum on Financing for Development (FfD) follow-up in New York from 15-18th April, 2019.

The aim of Financing for Development is to mobilize sufficient financing to successfully implement the Sustainable Development Goals (SDGs) by 2030. The Forum reviewed the implementation of the Addis Ababa Action Agenda (Addis Agenda) in the last four years and, to forge consensus to advance the implementation of the 2030 Agenda of Sustainable Development against the rising economic and non-economic risks.

The implementation of the Addis Agenda include mobilization of domestic revenue, enhancement of domestic and international private business, finances and cooperation, harnessing of new technologies, promotion of trade, science, technology and capacity building including data, monitoring and follow-up.
Hon’ble Lyonpo in his National Statement highlighted the synergies between the SDGs and our development philosophy of Gross National Happiness. Hon’ble Lyonpo also participated in the side event on “How much should Asia and Pacific invest to achieve the SDG?” organized by UNESCAP. Lyonpo also participated in the Ministerial Finance Dialogue 1 on Promoting inclusive growth and reducing inequalities and Ministerial Finance Dialogue II on Mobilizing Finance for climate action. Lyonpo had bilateral meeting with Mr. Yannick Glemarec, Executive Director of Green Climate Fund to discuss issues of mutual interests.Bhutan’s participation in the FfD forum is important to leverage our fiscal space in the implementation of the SDGs by 2030.

The 2019 forum’s recommendations and the recommendations of the past three forums on financing for development will be submitted to the first quadrennial high-level dialogue on financing for development in September, 2019, back to back with the High-Level Political Forum (HLPF).

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